Singapore Budget 2020 - DBS Research 2020-02-19: Relief, Resilience, Recovery

Singapore Market Strategy - DBS Research | SGinvestors.io SHENG SIONG GROUP LTD (SGX:OV8) KOUFU GROUP LIMITED (SGX:VL6) SINGAPORE TECH ENGINEERING LTD (SGX:S63) MAPLETREE COMMERCIAL TRUST (SGX:N2IU) CAPITALAND MALL TRUST (SGX:C38U)

Singapore Budget 2020 - Relief, Resilience, Recovery




Unprecedented budget tackling short term challenges...

  • Budget 2020 focused on both a decisive short-term response to Covid-19 and the longer-term needs of the country. An overall budget deficit of S$10.9bn (2.1% of GDP) is expected for FY20, exceeding 2009’s S$8.7bn deficit during the GFC. This budget includes a huge S$4bn Stabilisation and Support package to stabilise the economy against Covid-19 by helping workers remain employed and aiding companies with cash flow.


…with eye on the future.

  • The government also introduced packages to
    1. enable companies and people to transform and grow,
    2. provide help for households to alleviate the higher cost of living,
    3. increase social spending,
    4. buffer against GST hike and
    5. set aside funds to fight climate change, to build a sustainable Singapore for the future.


Lift for hospitality related sectors, consumer companies to benefit.



Maintaining STI 3,500 year-end target.

  • The generous handouts to provide reliefs for both corporates and individuals will place the economy on a stronger footing to recover once this storm blows over.
  • We are keeping our end-2020 STI target at 3,500 pegged at around 12.59x (-0.5SD) FY21F PE, on the premise of a V-shaped GDP recovery from 2Q.


Bottoming signals on Covid-19.

  • The situation in China has been improving since 5 Feb, and this trend should continue. For Singapore, Dorscon Orange could start to reveal its effectiveness as soon as end-Feb. Chinese factories should return to normalcy in 2Q and could well make up for some of the lost time by ramping up production in 2H.
  • We are looking at WHO to deliver the ‘magic pill’ in 2Q by lowering the risk assessment for China and the region. This should unleash pent-up travel demand and increase MICE activities in 2H. Adding the strong support from Budget 2020, the impact of Covid-19 on FY20 corporate earnings may not be as bad as feared.
  • Click the 'view full report' button below for complete analysis.





Janice CHUA DBS Group Research | Kee Yan YEO CMT DBS Research | Andy SIM CFA DBS Research | https://www.dbsvickers.com/ 2020-02-19
SGX Stock Analyst Report BUY MAINTAIN BUY 1.410 SAME 1.410
BUY MAINTAIN BUY 0.84 SAME 0.84
BUY MAINTAIN BUY 4.640 SAME 4.640
BUY MAINTAIN BUY 2.600 SAME 2.600
BUY MAINTAIN BUY 2.950 SAME 2.950



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